Trump’s focus on America’s trade deficit with China is not a solution and diverst attention from US’s underlying weakness.

 

China’s rise will remain the greatest challenge to America for decades to come. The US cannot prepare for it, or counter it, by remaining static and presuming that its current state of supremacy will enable it to remain on top economically, politically, or militarily. America needs a candid dialogue between the American people, their legislators and businesses to dissect our own mistakes and what needs to be done—realistically—to prevent them from happening in the future.

Just as the Chinese came to recognise that they had a hand in their own demise as a result of poor planning, a weak foreign policy, and impotent armed forces during what they refer to as their Century of Humiliation, the US would be well advised to consider what it might have done differently to avoid the need for a trade war, having its intellectual property stolen, and the continuation of targeted cyber intrusions by China.

Donald Trump’s incessant focus on America’s trade deficit with China is not a solution to the problem and diverts attention from America’s own underlying weaknesses. The Trump administration (and future administrations) would be well advised to do something meaningful about America’s chronic budget deficits, crumbling infrastructure, out of control defence spending, excessive legislative partisanship, deteriorating student performance, and standing in the world. These subjects are, ultimately, a greater threat to America’s ability to successfully compete than China’s rise. China’s rise would be less of a concern if these issues had been addressed decades ago.

Despite what citizens of both countries might be inclined to believe, America and China have both benefited by engaging one another and jointly participating in common objectives since the formal establishment of bilateral relations in 1979.

Some examples are the successful containment of the USSR, participating in a negotiated peace in Korea and Vietnam, China’s stimulus package in the wake of the Great Recession (which helped keep America and the global economy afloat), and scientific collaboration to create treatments for Covid-19. Today’s politicization of the bilateral relationship on both sides makes opportunities for collaboration scarce.

It is, of course, in both countries’ interests to find a way to make the bilateral relationship work again. The potential business impacts of a permanent fissure between Beijing and Washington are massive. Two-way trade between the two was $660 billion in 2018. Chinese foreign direct investment (FDI) into the US reached an annual peak of $47 billion in 2016, while annual US FDI into China peaked at $117 billion in 2018. There is a lot at stake—so much so that various actors within the bilateral relationship want nothing to do with the enduring battle at the national government level.

Businesses just want to do business, US state governors want all that Chinese FDI to continue, and American universities want the significant flow of Chinese students to their institutions to continue. Chinese students form the largest contingent of foreign students in the US, with more than 130,000 graduate students and 148,000 undergraduates enrolled in 2017-2018. An astounding 21% of all students at Harvard came from China in 2019. Their ability to pay full freight helps to keep many of America’s colleges and universities afloat financially.

But Beijing should not get a pass when it comes to behaving like a responsible member of the international community. It should be held to the same standard that members of all international organizations are held to—whether it is at the World Trade Organization, the UN, or the multilateral development banks.

When China is caught using entities at the UN to promote Chinese government objectives, or that otherwise violate the UN Charter, it should be called out for it and held accountable. That is the only way that lasting progress toward an equitable bilateral relationship can be achieved.

An America that is true to its values has little to fear from China. So let China understand that America did not ascend to its numerous and immeasurable heights by being timid or bashful in asserting itself. While doing so has not always ended so well (as the wars in Korea, Vietnam, and Afghanistan illustrate), it has stood for liberty and righteousness and freedom, even if its tactics were later judged to be wrong. America is still the world’s largest economy with its largest and most powerful military, its reserve currency, its superior research and technological competencies, and a whole host of capabilities that remain unmatched. While America remains on top, it should use that supremacy to get our house in order so that it is better positioned to take on China, and the plethora of other challenges it faces, from a position of strength and with resolution.